University considering future of tuition, financial aid

URBANA — Future University of Illinois students can expect tuition rates to go up again next year, but the school is also considering discounts and potential increases in financial aid.

Trustees plan to adopt 2012-2013 tuition rates in January, and administrators reviewed the UI's financial position and tuition policy with a board committee on Monday.

Tuition rates will be generally pegged to inflation, under board policy, but officials declined to assign a specific number to the proposals under consideration.

The state's "guaranteed tuition" law requires the UI to keep tuition stable for four years for each incoming class, but it tends to build in four years worth of inflationary increases, based on the Consumer Price Index, Higher Education Price Index and other factors.

Last year, the UI raised tuition rates by 6.9 percent, or the equivalent of about 2.7 percent a year for four years. General tuition at the Urbana campus is $5,552 for freshmen, though many students pay surcharges for specific programs. Engineering tuition is $7,964 a semester.

UI President Michael Hogan said the university provides about 2 percent less in financial aid than its Big Ten competitors, and it may need to beef up that number to maintain a recruiting edge and provide "accessibility and affordability."

"We're talking about it in-house now," he said.

Hogan also is interested in a program under consideration at Indiana University to provide summer tuition discounts, to encourage students to attend year-round, finish school more quickly and better utilize UI facilities during the summer months.

"The overall advantage is to move students through cheaper and faster," Hogan said.

"It might get some students out of school in three years," added Trustee James Montgomery.

About half of all UI students receive some financial aid, and officials hope to maintain or increase that, said UI Vice President and Comptroller Walter Knorr. The UI is providing almost $54 million in financial aid this year, on top of state and federal grants.

Last year, UI students received $179.2 million in financial aid — about $68 million from federal Pell grants, $59 million from state Monetary Award Program grants and about $49 million directly from the UI. By comparison, UI students received about $70 million in financial assistance in 2000.

Trustees adopted a policy last year to set new tuition rates each January for the following school year to help families better plan for college costs, and help the university put together financial aid packages and recruit students earlier.

Last year, tuition rates weren't adopted until March, and in recent years it's been as late as June because the state's funding picture was so uncertain, officials said.

Knorr said the goal of the tuition policy is to set rates that can sustain academic quality, meet inflationary cost increases, and address crucial operating needs and the impact of changes in general tax support.

This year, state support remains a question mark and cash flow is a concern, he said.

Knorr said the UI's state funding was $668 million for this school year, down from more than $1 billion in inflation-adjusted dollars in fiscal 2002. During that same period, the UI has increased its enrollment by 10,000 students, and tuition income is $931 million annually, he said.

Meanwhile, the state still owes the university $139 million from fiscal 2011, which ended June 30, and hasn't paid about $217 million in bills incurred in this fiscal year, Knorr said. That total of about $356 million doesn't include about $15.3 million in financial aid grants from the Illinois Student Assistance Commission.

"This is not going to be fixed soon," Knorr said of the state's financial crisis. "We're just going to have to adjust internally."

Beyond the uncertain state funding, Trustee Ed McMillan said, the university faces potential cuts at the federal level as Congress looks for ways to cut the deficit.

"We've got to continue to find ways to deliver a world-class product with more efficiency," McMillan said.

Knorr presented figures showing the average faculty salary at the UI's Urbana campus, for assistant professors on up, is $106,000 a year. That's third among Big Ten public universities, behind Michigan and Penn State and just above Ohio State, he said. Nebraska was last, at about $92,000.

The faculty salary gap between the Urbana campus and top private research universities grew from $3,100 a year in 1982 to $26,900 in 2011, he said.